Comcast and Netflix agree to 'mutually beneficial' networking deal: Is it good for you?

Much has been made about Netflix's degraded performance of late on Comcast and Verizon, but there's finally some resolution. Comcast has announced a "mutually beneficial interconnection agreement" with Netflix that would appear to put the troubles behind them. Comcast:

Working collaboratively over many months, the companies have established a more direct connection between Netflix and Comcast, similar to other networks, that’s already delivering an even better user experience to consumers, while also allowing for future growth in Netflix traffic. Netflix receives no preferential network treatment under the multi-year agreement, terms of which are not being disclosed.

Though the terms aren't being disclosed, it isn't hard to imagine that Netflix had to pay Comcast for the privilege of connecting to their customers unfettered. That would certainly make the "mutually beneficial" agreement beneficial for Comcast.

Netflix may not be getting preferential network treatment, but there's no question that Comcast customers Netflix have suffered a degradation in performance over the past few months. According to reports, the issue was peering: Comcast (and other ISPs including Verizon) weren't opening new network connections to Netflix, creating network congestion. This agreement presents relief for Comcast customers.

Will Netflix reach a similar agreement with Verizon? We'll see. But the precedent has been set, and apparently the arrangement is satisfactory enough for Netflix to have agreed to the terms "for years to come."

The idea of an ISP impeding one particular service's network traffic might stick in your throat. But make no mistake — Netflix produces a huge amount of traffic over the Internet. They're in an exceptional situation.

By some estimates, one third of traffic at peak hours is the result of Netflix-related streaming. The company continues to pile on millions of new customers from quarter to quarter as more and more people get comfortable streaming video over the Internet. Hopefully Netflix will do more to improve the efficiency of their streaming video technology, especially as customers expect ever-higher image quality (and Netflix itself has promised to start delivering 4K content this year, which will push bandwidth even further).

How's it likely to affect you? Well, if you're a Netflix customer on Comcast's network, you should see fewer buffering issues and connection errors to Netflix through your devices.

Over the long haul, we'll see whether you'll pay more for Netflix. Some of that will depend on how many more ISPs come to Comcast looking for money, and how many have the muscle to throttle the company's traffic in appreciable numbers.

Reader comments

Comcast and Netflix agree to 'mutually beneficial' networking deal: Is it good for you?

Well I'm a comcast/netflix subscriber(i live a mile from netflix headquarters in los gatos/campbell and sometimes I find that netflix has overall better streaming quality then comcast has. Now if comcast was to say hey netflix u guys have this down why don't we make a trade u encode are stuff and stream it and we provide our customers with top speeds, how this will hurt gaming torrenting, voip, etc I'm not sure but i do know that id love to see an xfinity go app for the apple tv as theirs days I take it to the other side of town to my sisters and enjoy my network of content via my sisters tv and router and my apple tv and laptop which I streaming from. :) any thoughts on this ?

Well, perhaps my initial prediction on the "who will pay" was off. I said we will. And both will pass those costs on to us. Maybe Comcast decided to hit up Netflix, but each of is will be paying sooner rather than later. Netflix is going to increase its cost. I expect our current plans will be $9.99 by year end.

I am in agreement with you and what really ticks me off is that I am not a Comcast customer, nor will I be a Comcast customer as I cannot stand them, yet I am going to get screwed by this deal and have to pay Netflix so that Comcast customers can get the content that they have been paying for anyway.

...and then Verizon and Netflix will have to come to a deal
...and then Level3 and Netflix
...and then Comcast and Walmart
...and then Verizon and Walmart
...and then Level3 and Walmart

repeat with Amazon, Apple, Google, Redbox...really anybody offering a service on the internet. Essentially, these "mutually beneficial" deals and all the discussion around Netflix boils down to Comcast and Verizon saying:

"Nice TCP/IP packets you got there. Shame if anything were to happen to 'em"

And of course, Netflix in 2007 would not have been able to pay this protection racket, leaving the streaming video market firmly in the grip of CableCo Video on Demand (which coincidentally, these ISPs largely run), or maybe in the hands of an at-that-time-still-capitalized incumbent like Blockbuster.

This bilateral Comcast/Netflix deal may put lipstick on the pig for Comcast customers, but while we allow it to be necessary, we will be choking off the innovation that allowed the internet to flourish in the first place.

With T-Mobile, no issues streaming Netflix from my HSPA+ OR LTE networks. I have always maintained my Verizon account because of grandfathered unlimited data plan I have. I finally dropped it, I have never even seen 1/2 the data speeds I'm getting from T-Mobile. Streaming the longest podcasts and Movies Over HD are never an issue. Just a great experience. Thank You T-Mobile.

So, non-Netflix subscribers will now get even worse bandwidth? The real issue should be that everyone gets the bandwidth they pay for all day, every day. Strategic throttling is wrong, and overselling bandwidth is too. I would argue that both are criminal and every ISP I have ever used should be treated as such by the tech media. I have used Comcast, AT&T, and WOW, and none of them lives up to their bandwidth claims during primetime. iMore and all tech blogs should regularly bring these companies to task for false advertising, cheating their customers, and skimping on infrastructure to favor profit over hostage users who have no opportunity to take their business elsewhere.

Actually, this agreement should SAVE Netflix some money, as they will no longer have to pay Cogent or Limelight for traffic going to Comcast's Network, they can essentially just pay Comcast directly and cut out the middleman. The real life scenario I can correlate that to would be if I went directly to a farm to buy milk, instead of going to the grocery store.

And for those thinking this is not good for net neutrality, this has nothing to do with it, Netflix is just choosing to build their own CDN instead of using a third party one. Google, Microsoft, and Apple all already do this, it's just that now Netflix is trying to do the same thing.

Here's a great article that gets into the technical details of why this is just business as usual:

And it is based on the assumption that this is only about Netflix building out its own CDN. As much as Netflix likes to talk about their own technology stack, if that were the case we would have been hearing for *months* about Netflix setting up it's own distribution centers near critical backbone points. Instead, we hear, without any technical preamble, and not from Netflix, but from Comcast, that Netflix has purchased more direct access *specfically to Comcast*. That does not sound remotely like a content provider setting up its own CDN, but more like the pipe owner exacting an extra toll from am existing, albeit heavy, user.

It was actually a joint statement, and it is a connection that bypasses Cogent, Limelight, etc. So, instead of the bandwidth being bought through a third party (as must bandwidth, including the bandwidth for iMore is purchased), Netflix is going straight to Comcast. Since the agreement is mutually beneficial, my bet is that Comcast is charging them LESS than what they would have paid through Cogent, Limelight, or some other third party. And since Comcast likely accounts for a large chunk of internet bandwidth that Netflix is paying third parties for, I'm betting it will save the company overall.

I'm not saying this is all good, just that it isn't as bad as the article, or some of the first commenters, think that it is.

It was a Comcast press release, in which Netflix was mentioned. Netflix, from its blog to its github repos, tends to love talking about its architecture and practices...in fact, regarding CDNs, they already have their openconnect initiative for any ISP. That may not have been suitable for Comcast, but it shows how aggressively open Netflix tends to be. When they are as forthcoming with this deal as they have been in the past, I will happily change my position, but, until then, both Netflix and Comcast histories suggest this was close to extortion than a standard CDN deal.

I think this sets a horrible precedent. This is the beginning of the end for users and business on the internet. We are about to see the biggest shake down and fleecing in internet history. ISP's are about to start strong arming companies to pay more so that their content can get to users/views without being slowed down to a snails pace. I wish there were something I could do to stop this!

let me tell you what this deal really is net neutrality is dead because the big courts backed up big business now comcast and verizon want a pound of flesh from netflix or their will be lucky if they get streaming speeds of 0.5 mb. yes i am very angry about this